Share prices in New York rebounded on Tuesday on optimism that a global market sell-off will stop.
Investors bought back shares after stock prices in Tokyo posted a record single-day gain.
The benchmark Dow Jones Industrial Average surged more than 700 points during trading. It closed at 38,997, up 294 from Monday.
The index had dropped for three trading days in a row and lost more than 2,100 points, as risk-averse investors unloaded their holdings.
Market players say investors are regaining composure with a view that they may have been over-concerned about a US economic slowdown.
They also say instability in the Tokyo Exchange is one factor in the New York Market’s volatility.
The market players also note that the Bank of Japan’s rate hike and the yen’s rise against the dollar have made it difficult for investors to gain profits by borrowing the Japanese yen at low interest rates and investing in foreign assets.